24 Feb 2015
Yellen speech fails to light a fire under GBP/USD
FXStreet (Mumbai) - The GBP/USD pair is back near 1.5445 levels after the initial reaction to Fed Chairwoman Yellen’s hawkish stance with regard to interest rates faded away. The pair hit a low of 1.54 after Fed chair, said interest rates could rise at any meeting post the change in forward guidance.
GBP/USD: Supported by 5-DMA and 10-DMA
The pair bounced-off from the 5-DMA and the 10-DMA located at 1.5417 and 1.5402 levels, respectively, after Yellen said Fed would not raise interest rates until it is reasonably confident on inflation, while stating that price pressures are likely to fall further in the near-term. The pair had dropped quickly to 1.54 levels on Yellen’s “liftoff possible at any meeting post change in forward guidance” comment.
However, the pair recovered back to 1.5445 levels as markets priced-in the overall dovish tone, as Yellen cited risks to the US economy due to slowdown in China and Europe, while stating that Fed’s “patient” approach means lift-off from record low interest rates unlikely for a couple of meetings. The 10-year Treasury yields are now down 2.2 basis points at 2.035%.
GBP/USD Technical Levels
The immediate support is located at 1.54, under which losses could be extended to 1.5342 (Feb. 20 low). On the flip side, resistance is seen at 1.5478 (100-DMA) and 1.55 levels.
GBP/USD: Supported by 5-DMA and 10-DMA
The pair bounced-off from the 5-DMA and the 10-DMA located at 1.5417 and 1.5402 levels, respectively, after Yellen said Fed would not raise interest rates until it is reasonably confident on inflation, while stating that price pressures are likely to fall further in the near-term. The pair had dropped quickly to 1.54 levels on Yellen’s “liftoff possible at any meeting post change in forward guidance” comment.
However, the pair recovered back to 1.5445 levels as markets priced-in the overall dovish tone, as Yellen cited risks to the US economy due to slowdown in China and Europe, while stating that Fed’s “patient” approach means lift-off from record low interest rates unlikely for a couple of meetings. The 10-year Treasury yields are now down 2.2 basis points at 2.035%.
GBP/USD Technical Levels
The immediate support is located at 1.54, under which losses could be extended to 1.5342 (Feb. 20 low). On the flip side, resistance is seen at 1.5478 (100-DMA) and 1.55 levels.